Chancellor urged to recover money lost from recruitment sector tax avoidance

Oh wow, now that is interesting, and will not doubt have consequences.

I don't understand why these microbusinesses don't fall foul of IR35.

edit: at a much earlier stage!

That was the 'wow' part of my response!

No Andrew has nothing to do with this, he is a British citizen working for a large UK recruitment agency.

The recruitment sector in the UK is huge with lots of employment opportunities for people with the right amount of self belief and confidence.

edit: I've just checked and he is still working for a large SAP recruiter in the UK.

He is British & Filipino a citizen of both, the username is Knightstrike.

We are taking about the same person, he is based in London but spent a month up in Newcastle which was a period of time that he thoroughly enjoyed in comparison to London.

It took him a long time and lots effort to get his UK passport issued but he finally made it here and started working in IT recruitment.

The question is whether the Anderson Group is definitely the same business as the disgraced Arthur Anderson accounting firm, it probably is.

Deliberate construction of micro personal service companies (PSC) does not sound terribly legal, plenty of people misuse a PSC with the intent to avoid IR35 and to pay themselves almost exclusively through dividends when in fact the business is a form of disguised employment.

It's not clear here exactly how they have used these micro businesses but it seems like a variation designed to take advantage of tax breaks for small businesses, in this case the real business does not appear to be all that small.

They will certainly have been extracting any profit from each micro business as dividends while using the structure to apparently reduce the NI payable on the 'employees'.

Someone has built a fancy accounting system probably automated that allows the billing systems to work in such a way that each couple of employees are being supplied from a different legal entity, they will be saving on auditing and overall accountancy fees as well as the NI.

Yes so far they are calling it 'avoidance' but it certainly isn't moral.

I ran my business as a sole trader when I didn't really have to as I passed the IR35 risk rules (I had lots of customers and I was in control of my individual destiny) I should really have been limited, whether being limited would have saved me anything during the 14 years I was trading is another matter but I sure as hell would have saved at the end when I could have walked away from all of it.